There are certain conditions to securing car finance in the country. It is one of the most competitive loans that requires one to have a regular job to qualify. A consistent employment history reveals the potential to afford payments, and this makes lenders happy.
Alternatively, if you seek car finance as an unemployed, provide sufficient proof to carry the repayments. It could be anything from a joining letter to getting a guarantor on the loan. There can be plenty.
The blog lists the best ways to get car finance as an unemployed person.
Can I get car finance with no or little employment history?
Yes, you can get car finance with no employment history or minimal one. If you have regular income in the form of part-time income and income from benefits, you may qualify. If you earn a rental, have equity in a business, or receive a pension, you may get one. It should be a legal earning source declared on your tax return.
However, if your only income is benefits, you may require an additional guarantee. A guarantor or a person agrees to pay on your behalf until you get the job. He should have a regular income, comprehensive employment history, and a stable credit score.
The reason is, providing independent car finance to individuals with no employment history implies additional liability without any means to pay it back. Such individuals may have a bad credit history. It may further impact the loan approval. No responsible lender approves the loan in this situation as it may impact financial well-being and lead to unnecessary debt arrears.
Alternatively, individuals with regular income and stable credit history share some credibility to pay the loan back in easy instalments. Thus, we, as responsible lenders approve the car finance deal.
What conditions limit your possibilities to qualify for car finance as unemployed?
Consider the conditions where you may not qualify for car finance as an unemployed. It would help you decide right. Here are some conditions where you may not get one:
- You are unemployed for over 6-7 months
- You have limited savings in your account
- You lack a guarantor to help you with repayments
- You and your partner both are unemployed
- You are young with no employment history
How to raise the possibility of guaranteed car finance if jobless?
You may not qualify for car finance under present circumstances, but you can definitely up the chances. You may not get guaranteed car finance until you can afford one. No responsible lender can provide one without screening.
However, if you want to know whether you qualify or not, check guaranteed car finance with no credit check facility. The check would not impact your credit history or get recorded. It helps you know the tentative costs and repayments, missed payments, and whether you can afford them with your present finances or not. If you cannot, here are other ways to tap for car finance:
1) Leverage your savings for car purchase
If you have been planning to purchase a car for a long and have saved for it, you may get it.
How?
You can use the savings as a deposit on the loan and qualify. You may only get fair interest rates as your credit is still low. Deposit money states that you are serious about the situation and can pay the repayments in instalments later.
Alternatively, if you lack sufficient savings or exhausted all to meet your present survival needs, it would be a bad idea. Using life-critical savings for car purchases may impact your living requirements and hence would not be a good idea.
2) Enter into joint car finance with a partner
However, not every loan provider grants this flexibility on car finance, we definitely help. If your partner has a credible history with good and regular income, you may qualify. It should be a mutual decision. You may need a car to travel or begin a business together.
We may approve the loan if your partner’s finances meet the required criteria. You may benefit from fine interest rates if your partner has a strong credit history. Yours may also impact the overall loan costs.
But, you may not get car finance if you have been unemployed for a year with a partner. The risk is higher for the lender here. If you can mitigate the risks by getting a job or a relevant offer letter, you may get one.
3) Individuals above 25 share high approval chances
It does not impact car finance applications directly, but indirectly it does. Individuals aged 17-22 are generally students with limited or no income. Moreover, they share untraceable or no credit history for a lender to analyse the affordability. In that case, a guarantor becomes mandatory.
Alternatively, if you are 25 and above with a balanced credit history, long credit and employment history, regular income, and driving experience, you may prove more reliable than a student. You may be unemployed, but you share higher possibilities of securing a consistent job.
Thus, this factor may turn out in your favour while seeking car finance. Not every loan provider considers this. When you partner with us, there are immense possibilities for the same.
4) Analyse the stakes before applying for car finance
It is very crucial to know the “why” behind your actions. You may need a car for interviews or work in a company, but affordability tops the concern. Analyse whether you can afford the principal and interest payments with the existing circumstances or not. If not, how soon do you see yourself getting a regular job and paying off debts first?
Clear past dues like instant cash loans – quick loans, payday loans, or no guarantor loans, in your profile before applying for car finance. It not just helps credit scores but also gets economic interest rates. Apart from paying debts, report them to credit agencies and update your file.
Bottom line
Getting car finance as an unemployed may be challenging. If you display your best efforts toward employment opportunities and get one, you may qualify. Though you can co-sign a loan with a guarantor or provide a deposit for car finance approval if the situation seems ideal.
Alternatively, wait until you get top of your finances with a job and limited debts in your profile. You may then qualify for low-cost car finance quotes.
Anna Johnson has more than 11 years of experience in direct lending industry of the UK. She is the Senior Content Editor at 24cashflow where she is leading a large team of loan experts. During her career, she has helped the loan aspirants to use the particular loans in the best way and improve their financial lives and status.
Anna Johnson is known for her in-depth research of the UK loan marketplace, as she has worked with many major lending firms in her career. During her educational phase, she has done a research on ‘Finance Fundamentals for Growing Business’.